
A recent federal court decision our firm litigated provides insight into a party's duty in e-discovery in federal court cases. The Court noted that all parties must make a thorough search of all computers in response to e-discovery requests. The Court entered sanctions against the defendant RV dealer and its owner for failing to comply with their obligations under Rule 26 of the Federal Rules of Civil Procedure to make a thorough electronic search of all computers utilizing search engines as opposed to simply producing what appeared in readily viewed files in the computers.
The case IWOI, LLC v. Monaco Coach Corp. and Barrington Motors Sales is pending in the Federal Court for the Northern District of Illinois. Plaintiff claims that Defendants violated the Magnuson Moss Warranty Act and the Illinois Consumer Fraud and Deceptive Business Practices Act by selling it a Monaco RV costing hundreds of thousands of dollars which allegedly had a preexisting "bump steer" problem. Defendants denied these allegations and claimed there was no "bump steer" problem or if there was such a problem it was a minor nuisance that didn't give rise to safety concerns.
After some discovery irregularities, Plaintiff obtained the right to have it own forensic computer expert Daniel Stratton to search Defendants' computers for withheld or missing documents. The motion for sanctions and other relief centers on what the Plaintiff found as a result of its expert's search.
Stratton discovered an e-mail from defendant Barrington Motor Sales' president Sean Bransky to Adam Gudger, the sales manager of defendant Monaco Coach Corporation (“Monaco Coach”). In support of Plaintiff's sanctions motion, Stratton attested in an affidavit that the email could have been located through an ordinary word search using the native search engine in the Windows operating system.
In the May 26, 2006 e-mail, Bransky describes the problems with the motor home that his dealership experienced when the motor home was driven:
The main issue is the drivability of the coach. When it arrived, we drove it and it did not drive like any other Beaver we've driven. It was very difficult to keep the road and a tremendous amount of bump steer. Also, there was a terrible clunking when the suspension moved up and down. We sent it to the frame/suspension specialists (Champion Frame align) and they said the trailing arms hit the frame at the front brackets when the vehicle dips with the air spring set at 10.5″. When they adjust the springs to 11.5,” the trailing arms don't hit but the bump steer increases to the point where it is hardly driveable.
We called Monaco and spoke with Taylor Spike who was very prompt and concerned about the issues. He sent out a factory chassis specialist from Indiana whose name was Randy. Randy spent a day and a half trying to figure this one out. He cured the trailing arm issue that was hitting the frame, but cannot cure the bump steer issue. There is still a large amount of clunking and banging under the coach when it is driven but he did not know what it was. He left back to Indiana today saying coach is still bad and does not know what to do except for trying heavier shocks and air limitors from the front air bags.
In awarding sanctions for Defendants' failure to produce this email, the Court found that:
The relevance of this document is obvious. Defendants, in their opposition to the motion for sanctions, spend a great deal of time explaining how this e-mail does not contradict Mr. Bransky's deposition testimony. That question ultimately is not for this Court to resolve. We note, however, that in his testimony, Mr. Bransky categorically denied that his dealership knew that the motor home had a bump steer problem and stated that even if such a problem existed, it did not present a safety issue. Both of these assertions seem, at least in part, to be contradicted by this e-mail message.
In concluding that Defendants should pay half the cost of Plaintiffs' expert as a sanction for failing to produce this one email the Court reasoned:
To claim now that plaintiff is at fault for not telling defendants how to search their computer system is specious. Defendants were on notice that plaintiff believed the production was inadequate and apparently did nothing further to locate additional electronic discovery until plaintiff forced the issue.The burden is not on plaintiff to figure out what relevant information might be stored on defendants' computers. Federal Rule of Civil Procedure 26(b)(1) states plainly that “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter.” .. The Rule, thus, places the burden on the party responding to discovery to identify whether there may be materials responsive to discovery requests that are stored on its system, but because of burden or cost are not reasonably accessible. In this case, that did not happen. Instead, defendants apparently pulled only materials that were still available on employees' desktops and made no effort, at least not one that has been explained to this Court, to look any further, even when they became aware that there was a possibility that there may be missing documents. Although Mr. Bransky may not have the necessary expertise to have found the document—which was not on a back-up tape or in other more remote storage but, instead, was on his own hard drive, as well as on defendants' network server—defendants were obligated to search those drives more throughly than they apparently did or explain why such a search would be too burdensome, costly or difficult and, therefore, should be excused.
You can view the full opinion by clicking here.
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